The latest inflation expectations data from Eurozone edged slightly higher in October according to the latest survey, rising from September’s 2.7% reading to 2.8% , but failed to provide support for the Euro earlier today.
At its October decision, the ECB opted for a pause scenario and kept its rates unchanged at the 2.15% level, citing that policy is set optimally at current levels to best absorb potential shocks amidst a period of elevated uncertainty.
The latest meeting minutes from the European Central Bank showcased the views of some policymakers that are in no rush to reduce rates further, noting that monetary policy is currently “in a good place”. The governing council noted that inflation remains close to the bank’s 2% target and the broader economy In their view is “resilient”.
Nevertheless, officials emphasized that inflation risks remain two-sided and stressed that the 2% deposit rate should be viewed as “sufficiently robust” as long as current, favourable, conditions persist. Others, however, urged maintaining a fully open stance regarding future policy moves.
European stocks are set to finish the volatile month of November flat, recording little to no change, after the momentum of the recent rally in global equities faltered and investors remained cautious and ready to incorporate fresh catalysts into their financial models. Nevertheless, regional benchmarks remain on track to end the week higher, reversing losses from earlier this month as expectations of further US Federal Reserve rate cuts continued to support riskier assets.
Technical Analysis
EURUSD Chart – The Euro’s prolonged pullback may come to an end soon as ECB policymakers adopt cautious stance
Resistance: 1.1650 (R1), 1.1740 (R2), 1.1830 (R3)
Support: 1.1470 (S1), 1.1400 (S2), 1.1290 (S3)